WORTHINGTON, Ohio, July 21, 2014 /PRNewswire/ -- Central
Federal Corporation (NASDAQ: CFBK) (the "Company"), the parent
holding company of CFBank, has announced the completion of a
private placement of an aggregate of 480,000 shares of 6.25%
Non-Cumulative Convertible Perpetual Preferred Stock, Series B, of
the Company with a liquidation preference of $25.00 per share ("Series B Preferred
Stock"). The Company sold 270,000 shares of Series B
Preferred Stock on May 12, 2014, and
an additional 210,000 shares of Series B Preferred Stock on
July 15, 2014, for an offering price
of $25.00 per share, which resulted
in gross proceeds to the Company of $12
million. After payment of placement fees and other
expenses, the Company's net proceeds from the sale of the 480,000
shares of Series B Preferred Stock in the private placement were
approximately $11.4 million.
Timothy T. O'Dell, CEO,
commented: "We are very pleased to announce our successful
completion of this private placement, which allows us to increase
the capital levels of the Company and CFBank, as well as to fund
our continued growth and expansion. We are particularly
appreciative of the support that we received from our existing
common stockholders."
Each share of Series B Preferred Stock sold by the Company in
the private placement is convertible into approximately 14.29
shares of the Company's common stock based on a conversion price of
$1.75 per share of common stock
(subject to certain anti-dilution adjustments). In addition,
the Company issued Warrants to purchase an aggregate of 1,152,125
shares of common stock to the purchasers of the Series B Preferred
Stock in the private placement. The Warrants are exercisable for a
period of five years at a cash purchase price of $1.85 per share of common stock (subject to
certain anti-dilution adjustments). The conversion of the
Series B Preferred Stock and the exercise of the Warrants are
subject to the restriction that in no event may shares of the
Series B Preferred Stock be converted into, or Warrants exercised
for, more than 19.9% of the Company's total outstanding common
stock or voting power unless and until the stockholders of the
Company approve the issuance of the shares of common stock upon the
conversion of the Series B Preferred Stock and exercise of the
Warrants in accordance with the applicable rules of the NASDAQ
Stock Market.
The Series B Preferred Stock and Warrants sold in the private
placement have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or under the securities
laws of any state, and may not be resold without registration or an
exemption from registration under the Securities Act and applicable
state securities laws. The Series B Preferred Stock and Warrants
were sold solely to "accredited investors" as defined in Rule
501(a) as promulgated under the Securities Act.
Important Information
The Company has agreed to call and hold a meeting of its
stockholders to present a proposal to approve the issuance of the
shares of common stock upon the conversion of the Series B
Preferred Stock and exercise of the Warrants (the "Special
Meeting"). The Company will file a definitive proxy statement
with the Securities and Exchange Commission (the "SEC") in
connection with the Special Meeting (the "Special Meeting Proxy
Statement"). Investors are urged to read the Special
Meeting Proxy Statement when it becomes available because it will
contain important information. You will be able to obtain the
Special Meeting Proxy Statement, as well as other filings
containing information about the Company, free of charge, at the
website maintained by the SEC at www.sec.gov. Copies of the
Special Meeting Proxy Statement and other filings made by the
Company with the SEC can also be obtained, free of charge, by
directing a request to Central Federal Corporation, 7000 N. High
Street, Worthington, Ohio 43085,
Attention: Thad Perry,
President, telephone (614) 334-7979.
The directors and executive officers of the Company and other
persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information
regarding the Company's directors and executive officers is
contained in the Company's Annual Report on Form 10-K filed with
the SEC on March 31, 2014 and the
Company's Proxy Statement on Schedule 14A filed with the SEC on
April 22, 2014. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Special
Meeting Proxy Statement and other relevant materials to be filed
with the SEC when they become available. Investors should
read the Special Meeting Proxy Statement carefully when it becomes
available before making any voting or investment decisions.
About Central Federal Corporation and CFBank
Central Federal Corporation is the holding company for CFBank, a
federally chartered savings association formed in Ohio in 1892. CFBank is a Full Service
Business Bank focused on servicing closely held companies and
entrepreneurs. With the addition in January
2014 of a Loan Production Office servicing the Cleveland
Market, CFBank now has a presence in 3 of the Largest Metro Markets
in Ohio plus 2 Banking Offices
located in Columbiana County.
Additional information about CFBank's banking services and the
Company is available at www.CFBankOnline.com.
SOURCE Central Federal Corporation